Automotive industry backs black industrialists

Naacam president Dave Coffey and MEC Rob Davies at the Naacam Show 2017 in Durban. The automotive industry should support transformation and help achieve 60% localisation, thereby helping to create 50 000 jobs, the minister said. Photo: Nqobile Mbonambi

Durban - Trade and Industry Minister Rob Davies on Wednesday said transformation should be supported by the automotive industry to ensure that black industrialists are given space to operate and play a role in growing the South African economy.

Davies was speaking at the inaugural National Association of Automotive Component and Allied Manufacturers of South Africa (Naacam) conference at the Durban International Convention Centre.

“We have set a target of getting 100 black industrialists over a period of three years. We have managed to promote and unearth 30 in our first year, but we are not happy because we believe we can do better in the following year. As a result, we have set the target of getting 70 next year,” said Davies.

The industry will host the show every two years as a platform from which to grow the automotive component and related manufacturing sectors in South Africa.

Davies said the transformation of the industry was non-negotiable and could never be compromised.

He said companies would be expected to comply with the broad-based black economic empowerment (BBBEE) regulations.

“I was very pleased to see a number of black industrialists, some of whom had started to enter this space as a result of the initiatives of the Original Equipment Manufacturers (OEMs). This is important because auto programmes will have to deliver a quid pro quo in terms of empowerment and in fact we are setting level four (of the BBBEE codes) as the requirement for entry,” said Davies.

The original OEMs are Toyota, Volkswagen and Mercedes-Benz. One of the issues discussed by the conference was how to find ways to raise local content in manufacturing in the automotive sector.

The conference heard that sector depended largely on imports and was only able to achieve between 38 percent and 39 percent of local content.

It has set itself to achieve a 60 percent local content. If they reach the 60 percent target it will be easier to create jobs for the country and introduce small companies in the sector.

“Small companies will have to come in and replace the imports. If we achieve 60 percent in localisation, we will be able to add 50 000 jobs or around that. That would make a huge impact on reducing unemployment in the country,” Davies added.

The critical matter of raising the local content value in locally manufactured vehicles was robustly discussed by OEMs, supplier, government and labour representatives. The sector is important in job creation, not only in the province but in the country as a whole.

eThekwini mayor Zandile Gumede said: “The automobile manufacturing sector in KZN directly employs 17 000 people and indirectly a further estimated 51 000 people. It is a sector renowned for providing good jobs and imparting significant technical skills while also providing career progression opportunities.”